LISTO Super Boost: How Low-Income Workers Will Benefit From the New Tax Offset Changes
A Quiet Win for 1.3 Million Workers
While the headline-grabbing super reform this week has been the new higher tax rates on balances above $3 million, there’s a less-discussed change that will help far more Australians: the increase to the Low Income Superannuation Tax Offset (LISTO).
As part of the super tax package backed by the Greens and passed this week, the LISTO will increase from $500 to $810 per year, and the eligible income threshold will rise from $37,000 to $45,000. These changes take effect from 1 July 2027.
That’s an estimated 1.3 million additional workers who’ll qualify, on top of those already receiving the offset.
How the LISTO Works
When your employer pays the compulsory 12% super guarantee into your fund, that contribution is taxed at 15% inside super. For someone earning $35,000 a year, their marginal tax rate (including the tax-free threshold) is effectively lower than 15%. That means super contributions are actually taxed at a higher rate than their regular income, which seems unfair.
The LISTO fixes this by refunding up to $500 (soon $810) of that 15% contributions tax directly into your super fund. It means low-income earners aren’t penalised for having superannuation.
Who Benefits Most
The LISTO disproportionately helps:
- Part-time workers earning under $45,000 (from 2027)
- Women, who make up the majority of part-time and lower-paid roles and already face a significant super gap at retirement
- Young workers in entry-level positions, where even small super boosts compound significantly over decades
- Carers and casual workers who move in and out of the workforce
For a worker earning $40,000, the current LISTO wouldn’t apply (income exceeds $37,000). Under the new rules from July 2027, they’d receive approximately $720 paid into their super, money that would otherwise have been lost to contributions tax.
The Compound Effect
The real value of the LISTO isn’t the $810 in any single year. It’s the compound growth over a working life.
For a 25-year-old receiving an extra $810 per year in super for 40 years, assuming 7% average annual returns, that single policy change adds roughly $170,000 to their retirement balance. For low-income workers who might otherwise retire with minimal super, that’s a meaningful difference.
What You Need to Do
The good news: nothing. The LISTO is automatically calculated by the ATO after you lodge your tax return and is paid directly into your super fund. You don’t need to apply.
However, there are two important things to check:
- Make sure you lodge your tax return. Even if your income is below the tax-free threshold, you need to lodge for the ATO to calculate and pay your LISTO.
- Check your super fund has your Tax File Number. If your fund doesn’t have your TFN on record, you won’t receive the LISTO. Contact your fund to confirm.
The Bigger Picture
This reform sits alongside the headline change of higher tax rates on super balances above $3 million (30% on earnings) and above $4 million (40% on earnings), effective from 1 July 2026. Together, the package shifts the super system slightly towards greater equity: those with the most pay a bit more, and those with the least get more support.
Whether these changes go far enough is debatable, with the Greens already flagging this as a “down payment” on broader super reform. But for the 1.3 million low-income workers who’ll benefit from the LISTO boost, it’s a practical improvement worth understanding.
Want to make sure you’re getting the most out of your super? An accountant or financial adviser can review your situation and make sure you’re not leaving money on the table. Find a super specialist on WealthWorks.
Frequently Asked Questions
What is the LISTO?
The Low Income Superannuation Tax Offset (LISTO) is a government payment of up to $500 (rising to $810 from July 2027) paid directly into your super fund. It effectively refunds the 15% tax on super contributions for low-income earners, so they don't pay more tax on their super than on their regular income.
Who is eligible for the LISTO?
Currently, you're eligible if your adjusted taxable income is $37,000 or less and at least 10% of your income comes from employment. From 1 July 2027, the threshold will rise to $45,000.
Do I need to apply for the LISTO?
No. The LISTO is automatically calculated by the ATO and paid into your super fund after you lodge your tax return. You don't need to do anything, but you do need to lodge a return to receive it.
